International

External shocks—ranging from commodity-price spikes, wars, and pandemics to foreign monetary tightening and sudden stops of capital—pose immediate and diverse challenges for central banks. The appropriate response depends on the shock’s nature (demand, supply, financial, or external liquidity), its persistence, and the economy’s structural characteristics. This article outlines practical tools, strategic choices, case evidence, and trade-offs central banks face when shocks originate beyond national borders.Classifying external shocks and the policy implicationsDemand shocks: Sharp contractions in global demand cut export earnings and weaken domestic production. Policy priorities typically pivot to sustaining economic momentum through rate reductions, ample liquidity, and targeted fiscal…

Sovereign debt restructuring is the negotiated or judicially mediated modification of the terms of a country’s external or domestic public debt when the original terms become unsustainable. Restructuring typically changes interest rates, maturities, principal amounts, or a combination of those elements, and can include conditional financing or policy commitments from international institutions. The purpose is to restore debt sustainability, preserve essential public services, and, where possible, re-establish market access.Key elements commonly included in a standard restructuringDiagnosis and decision to restructure. The debtor government and advisers assess whether the country can meet obligations without severe economic harm. This often relies on…

Understanding how energy prices are set requires following multiple interlocking markets, physical logistics and policy levers. Prices emerge from the interaction of supply and demand, but they are shaped by benchmarks, contracts, transportation, storage, financial instruments, regulation and unexpected shocks. This article explains the main mechanisms across oil, natural gas, coal and electricity, uses concrete examples and data points, and highlights the roles of market participants and policy.Basic mechanics: supply, demand and market structureSupply and demand fundamentals: Production volumes, seasonality, economic growth, energy efficiency and fuel substitution determine baseline pressure on prices.Market segmentation: Some commodities trade globally with common benchmarks;…

Global inequality—both between countries and within them—has been shaped by a complex mix of economic, technological, political and environmental forces over the past four decades. Some trends reduced differences across countries, notably rapid growth in China and parts of Asia; others sharply widened income and wealth gaps inside most advanced and many emerging economies. Understanding the drivers helps explain why wealth and income cluster in the hands of a few while large populations remain vulnerable.Key forces shaping the economyStrong returns on capital relative to overall expansion The dynamic underscored by Thomas Piketty—showing that capital yields can outstrip economic growth—remains pivotal.…

Relying on a single energy supplier occurs when a household, business, community, or country receives most or all of its electricity, natural gas, heating fuel, or essential components for renewable technologies from one provider, whether that provider is a lone company, a specific foreign nation, a particular fuel source, or a single point within the supply chain; such dependence heightens vulnerability, as disruptions, cost surges, technical breakdowns, policy changes, or geopolitical tensions affecting that sole supplier can disproportionately impact consumers and broader systems.Types of Single-Supplier DependenceSingle company or utility: A monopoly or dominant supplier providing electricity, gas, or district heating…

Global interest rates determined by major central banks and mirrored in international bond yields influence the worldwide cost of borrowing. Their effects ripple into everyday expenses such as mortgages, rents, groceries, energy, and consumer loans, even when local central banks set domestic policy. This article describes the transmission mechanisms, presents specific examples and figures, and highlights how households, businesses, and policymakers perceive and react to shifts in global rates.Key transmission channelsGlobal interest rates influence local living costs through several linked channels:Exchange rates and import prices: Higher global rates, especially in reserve currencies, attract capital to those currencies. That can depreciate…

Weak or incomplete environmental data is a pervasive challenge for governments, regulators, and companies trying to enforce climate rules. Weak data can mean sparse measurement networks, inconsistent self-reporting, outdated inventories, or political and technical barriers to access. Despite these limits, regulators and verification bodies use a mix of remote sensing, statistical inference, proxy indicators, targeted auditing, conservative accounting, and institutional measures to assess and enforce compliance with climate commitments.Key forms of data vulnerabilities and their significanceWeakness in climate data emerges through multiple factors:Spatial gaps: scarce monitoring stations or narrow geographic reach, often affecting low-income areas and isolated industrial zones.Temporal gaps:…

The public discourse equates energy storage with lithium-ion batteries, and for good reason: batteries have enabled rapid advances in grid flexibility, electric vehicles, and distributed energy systems. Yet a comprehensive energy transition requires a broad portfolio of storage technologies. Different storage forms deliver varied durations, scales, costs, environmental footprints, and grid services. Treating storage as a single-technology problem risks technical mismatches, economic inefficiencies, and missed opportunities for resilience.The key capabilities that storage should offerEnergy storage serves more than one purpose. Systems are evaluated based on:Duration: spanning milliseconds to seconds for frequency regulation, minutes to hours for peak shifting, and days…

A major shift in Israel’s intelligence leadership is taking shape as tensions with Iran persist, and earlier assumptions about how the conflict would unfold have not been realized, prompting renewed scrutiny of strategic choices, decision-making processes, and the future course of regional security policies.A substantial shift is unfolding across Israel’s intelligence network even as the nation remains deeply immersed in its prolonged, intricate standoff with Iran. Central to this evolution is the imminent installation of Roman Gofman as the new director of Mossad, Israel’s foreign intelligence service. His entry follows weeks of persistent hostilities that have failed to produce the…

Accurate emissions accounting is the foundation of effective climate policy, corporate climate strategies, and investor decision-making. When emissions are misstated, omitted, or double-counted, the result is not merely technical error: it warps incentives, delays mitigation, misdirects finance, and erodes public trust. Below I explain how and why poor accounting matters, give concrete examples and data, and outline practical fixes.What good emissions accounting is supposed to doGood accounting should reliably measure greenhouse gas (GHG) sources and sinks; assign responsibility across actors and activities; allow tracking of progress against targets; and enable comparable, verifiable claims. That requires three elements working together:Clear boundaries:…